4. Standard of Review

4.1. Timeliness

Rule 12.1(a) of the Commission's Rules of Practice and Procedure (Rules) provides that parties may file settlements "by written motion any time after the first prehearing conference and within 30 days after the last day of hearing...." However, Rule 1.2 permits "liberal" construction of the Commission's rules in the interests of justice and expressly authorizes "deviations" from the rules for good cause. Though the active parties filed their settlement some four months after hearings, they have established good cause for doing so. They remained in regular contact with the ALJ, sought timely modifications of the established schedule, and diligently pursued negotiations on the complex issues this application raises. Rule 12.1(a) should be waived here; accordingly, the settlement is timely.

4.2. Grounds for Approval

To approve a settlement, Rule 12.1(d) provides that the Commission must find that the settlement is "reasonable in light of the whole record, consistent with the law, and in the public interest."

Depending upon the matter at hand, the Commission may examine a number of factors in making a determination under Rule 12.1(d). These may include: (1) the risk, expense, complexity and likely duration of further litigation, (2) whether the settlement negotiations were at arms-length, (3) whether major issues were addressed, and (4) whether the parties were adequately represented.¹⁰

When presented with an all-party settlement, the Commission initially focuses upon the following particular considerations and asks whether: (1) the settlement commands the unanimous sponsorship of all active parties to the proceeding; (2) the sponsoring parties are fairly representative of the affected interests; (3) no term of the settlement contravenes statutory provisions or prior Commission decisions; and (4) the settlement conveys to the Commission sufficient information to permit it to discharge its future regulatory obligations with respect to the parties and their interests.¹¹

¹⁰ See D.10-10-035 (citing D.88-12-083, (1988) 30 CPUC2d 189, 222).

¹¹ See San Diego Gas & Electric Company, D.92-12-019, (1992) 46 CPUC2d 538, 550-551, which first articulated this standard. Subsequent decisions interpret the term "active parties" to refer to those parties that have participated in an ongoing, meaningful way. No Commission decision interprets the term to include every person or entity that, after obtaining party status, declined to participate further.